Nightmare on Wall Street is not over yet

Don’t let this week’s soothing rise in US stocks lull you into a false sense
of security. There are still plenty of nasty surprises lurking in financial
markets, waiting to pounce on unsuspecting victims. For those who aren’t
prepared, Halloween could last till Christmas.

By Antony Currie, breakingviews.com

6:11PM GMT 31 Oct 2008

That’s a frightening thought, especially since so many have been spooked by poltergeists for a year or more. We’ve suffered bone-chilling writedowns and their sequels; ran screaming from Wall Street chainsaw massacres; been plagued by the growing amount of weirdo government-funded body-snatching; and scared stiff by pseudo-economic experiments to create ghastly bailouts and Bankenstein monsters. But like a bad movie, it ain’t over yet.

Next week is the US presidential election – who knows what brain-eating plans the winner may put in motion. Detroit’s own walking dead, Ford and General Motors, look set to announce another set of blood-curdling losses. Some unsuspecting institutions could yet be mowed down by the runaway demon that is Volkswagen-Porsche. And bank earnings in Europe will just pile on the terror.

But there’s more: November 14 marks the witching hour for banks to sign up for Tarp cash; those who don’t might disappear in a puff of smoke. Investors fed up with poor performance and mounting losses could start pulling the plug on hedge funds by the end of the month. And by December the likes of Goldman Sachs and Morgan Stanley might have to report losing a limb or two in the recent battle against the forces of market hell. It’s enough to make your hair stand on end.